US Budget Crunch: CBO Warns Federal Interest Costs Now Higher Than Defense Spending, Deficits To Remain Above 5.5% Until 2034
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 19 2024
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Source: Business Insider
- Rising Federal Deficit: The Congressional Budget Office (CBO) warns about the growing federal deficit, with interest costs surpassing defense spending for the first time.
- Deficit Projections: CBO projects a rise in the federal deficit to $1.9 trillion for fiscal-year 2024, increasing from previous estimates.
- Debt and Interest Costs: By 2034, the deficit is expected to reach $2.9 trillion, with interest costs becoming the largest expenditure item in the federal budget.
- Spending Trends: Federal outlays are forecasted to increase significantly, driven by Social Security and Medicare costs, while revenue growth may not keep pace with rising expenditures.
- Economic Impact: Experts highlight concerns over escalating interest costs and the impact on bond markets, suggesting potential volatility based on inflation fears and deficit spending.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
